Auto stocks surged up to 5.3 per cent following the government's decision to exempt electric vehicles and automobiles run on alternative fuels from permit requirements.
Shares of Hero MotoCorp soared 5.27 per cent, Bajaj Auto 5.06 per cent, Motherson Sumi Systems 4.15 per cent, Mahindra & Mahindra 4.12 per cent.
Besides, TVS Motor Company stock rose 3.68 per cent, Bharat Forge 2.87 per cent, Tata Motors 2.80 per cent and Ashok Leyland 1.54 per cent on BSE.
Led by gains in these stocks, the BSE auto index went up 2.07 per cent to end at 24,704.04.
Hero MotoCorp and Bajaj Auto were the top gainers in the Sensex pack.
In the broader market, the BSE Sensex spurted 147 points to end at 38,389.82.